Gold News & Info

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold fell 1.2% as another round of soft U.S. economic data extended yesterday's risk-off sentiment. The U.S. dollar and Treasury bonds both picked up safe-haven inflows while equities and commodities slid on reports that the ISM services index slowed to a five-month low and consumer comfort fell to a two-month low in April. The gloom was little offset by the positive news that jobless claims fell last week for the first time in a month. The other precious metals also fell hard, with silver down 2.1%, platinum 2%, and palladium down 1.2%.

At the close: June gold fell $19.20 to $1,634.80; July silver lost 63 cents to $30.01; July platinum dropped $31.30 to $1,533.10; and June lost $8.10 to $661.35 an ounce.

Gold continues to trade in a narrow band inversely to the dollar, taking its cues from mainly from prospects for more easing from the Federal Reserve. Despite mounting evidence that the economy is stagnating, most traders believe the Fed will keep its powder dry in case things get really bad. If tomorrow's monthly non-farm payrolls report comes in lower than forecasts of 160,000 new jobs, the pressure will rise and gold will likely rally while the dollar drops. But most analysts believe the bar has been set so low�only 40,000 more than March's disastrous total and far too few to put a dent in unemployment�that little will change for now.

At least one important economist thinks a double-dip recession is on the horizon. NYU's Nouriel Roubini, who famously predicted the housing market crash and subsequent recession in 2008, told the Milkin Institute's Global Conference in California yesterday that GDP will be "lucky" to grow at 2% this year and could easily shrink to near-zero in 2013. He cited wage-stagnation and crippling national debt as the main drawbacks to growth, but added that the eurozone debt crisis and conflict in the Middle East are also likely to damp global growth and create headwinds for the U.S. economy. If he's right again, expect strong policy interventions from the Fed and a much higher gold price.